Cash premiums of Asia’s fuel oil hit multi-month highs on Monday, helped by a further improvement in market sentiment as the glut in supplies has shown signs of easing in recent weeks, prompting suppliers to hold on to their cargoes, traders said.

“Suppliers are holding back from offering cargoes because supplies (in Singapore) have finally started to decrease after months of low arbitrage volumes and that’s boosting premiums,” said a Singapore-based trader.

“It’s a bit of a squeeze,” the trader said.

Cash premiums of the 380-cst fuel oil FO380-SIN-DIF rose to a high of 35 cents a tonne to Singapore quotes, the highest since May 5 and up 27 cents a tonne from the previous session.

Similarly, cash premiums of the 180-cst fuel rose 35 cents to $1.47 a tonne to Singapore quotes, their highest since June 2015.

The rise in cash premiums comes despite no cash deals being reported in the Platts window on Monday and just three offers, all of which were for the 380-cst fuel, industry sources said.

This compares to three cash deals totalling 60,000 tonnes last Monday and a total of 16 offers for both fuel grades.

“We’re probably going to continue seeing an absence of suppliers over the next couple of weeks which could push premiums even higher,” said another Singapore-based trader.

Onshore supplies of Singapore fuel oil fell to a seven-month low on Thursday, dropping by 2.16 million barrels, or about 322,000 tonnes, in the week to Aug. 25 to a total of 21.43 million barrels, or 3.2 million tonnes, the latest official data showed.

Since the start of August, onshore inventories have fallen by 5.2 million barrels, or 776,000 tonnes.

This follows three months of falling arbitrage volumes into East Asia from April to July, most of which arrives in Singapore, because of tightening supplies, increased demand and uneconomic arbitrage opportunities.

In neighbouring Malaysia, Vitol’s storage unit, VTTI, said late on Friday that it had resumed normal operations at its ATT Tanjung Bin (ATB) terminal near Singapore.

The Johor Port Authority ordered the terminal to suspend operations following an oil spill on Wednesday when tanker MT Trident Star was taking on bunker fuel.

Pertamina recently offered three 200,000 barrel cargoes of LSFO for delivery on the same dates of which only one was awarded to BP for delivery between Sept. 1 and 2 at an unknown price level.

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SINGAPORE CASH DEALS – No cash deals reported. For further details, please see